Investing in high-yield dividend stocks with sustainable payouts is a solid strategy for earning significant and worry-free passive income. Canadians can look for companies with solid fundamentals, a history of solid dividend payments, and growing earnings and cash flows to support future payouts. These Canadian stocks are most likely to pay, maintain, and even increase their distributions over time.
With this background, here are two high-yield Canadian dividend stocks to buy now for a steady passive income.
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High-yield stock #1
Investors seeking high-yield dividend stocks with reliable payouts could consider TC Energy (TSX:TRP). With a low-risk, highly regulated portfolio, the company consistently generates robust earnings and cash flows. This financial stability supports its dividend payouts despite economic and commodity price fluctuations.
Since 2000, TC Energy’s dividend grew at a compound annual growth rate (CAGR) of 7%. This payout history shows its commitment to returning value to shareholders and its ability to sustain and grow dividends over the long term.
TC Energy is strategically positioning itself for continued growth through the planned spinoff of its Liquids Pipelines business, South Bow. This move aims to enhance efficiency and boost shareholder value. Additionally, the company is optimizing its natural gas operations to capture higher growth and drive efficiency.
The company’s robust capital program significantly influences its growth strategy. TC Energy is poised to bolster its future earnings and cash flows by placing multi-billion-dollar assets into service, reinforcing its ability to support dividend payments.
TC Energy remains committed to strengthening its core business in natural gas pipelines and storage. The company is also allocating modest capital toward emerging energy solutions, such as carbon capture, utilization, storage, and hydrogen. These initiatives will strengthen its competitive position in the sustainable energy sectors.
TC Energy’s diversified asset base, focus on reducing debt, and a solid pipeline of utility-like projects will likely support sustainable dividend growth. In the long term, the company plans to increase its dividend by 3-5% annually, while its current dividend yield stands at an attractive 5.7%.
High-yield stock #2
Shares of Canadian communication giant BCE (TSX:BCE) could be a valuable addition to your portfolio for its high yield and solid track record of dividend growth. BCE stock offers a high yield of more than 10%. The recent pullback in its stock has driven its yield higher. Notably, competitive headwinds in the wireless segment and macro challenges have weighed on its financials and stock price.
Despite the near-term headwinds, its payouts are well-covered. This leading communication company has increased its dividend for 16 consecutive years. Moreover, it is focusing on higher-margin subscribers and implementing cost-saving measures to support its earnings and future dividend payments.
BCE is well-positioned for sustained long-term growth thanks to its extensive service footprint, robust wireless infrastructure, and expanding fibre internet network. Moreover, its focus on cost reductions, operational efficiencies, and growing digital capabilities position it well for future growth.
BCE’s diversification into digital platforms and advertising technology is yielding positive results. These growing revenue streams complement its core business and will help mitigate risks associated with traditional telecom services.
BCE’s high dividend yield, consistent dividend growth, and strong long-term growth potential make it an excellent choice for investors seeking steady passive income.
